The flexible accelerator theory
A) recognizes that the desired capital-output ratio is not a constant.
B) assumes that firms can make this period's actual capital stock equal to the desired capital stock.
C) sets this period's expected output equal to last period's actual output.
D) recognizes that a constant fraction of the capital stock is replaced each period.
A
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If Juana contracts to buy U.S. office equipment in U.S. dollars and her domestic currency depreciates against the U.S. dollar between the time the contract is signed and the bill is paid, she will wind up paying less for the equipment because she stayed in the spot market
Indicate whether the statement is true or false
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.